In a week when Sainsbury’s finally revealed it will go contactless this year and when Eurovision said it will be cash-free and payment wearable full, it shouldn’t come as a surprise that new data confirms contactless payments’ dominance in Europe.
Three is the magic number
Three billion contactless transactions have been made using Visa cards on the continent in the last 12 months, according to data from Visa Europe. That’s nearly triple that of the same period in the previous year.
The data shows that European consumers used their cards 360 million times in April alone – that’s nearly 140 transactions per second and a 150% increase from the 143 million transactions in April 2015 – with the average value rising 12% to €13.83.
In 2013, contactless payments accounted for one in every sixty transactions; in 2015 it was one in every five.
Hey, everyday spender!
As we have explored before, the inherent speed of contactless payments has changed people’s paying habits. More and more people are now accustomed to making top-up food purchases throughout the week rather than the traditional big weekly shops. More people now also pay for lunches, coffees and other on-the-go options.
Restaurants experiencing the greatest year-on-year growth in contactless transactions (153%), followed by general retail (146%), supermarkets (119%), and food and drink including fast food (96%).
Infrastructure is key
Contactless payments were by no means an overnight success. In fact, they weren’t even a proper success after a year. It takes a long time to build up a sufficiently vibrant infrastructure to make something worth it. Today, there are more than 3.2 million terminals used in stores and restaurants across the continent. That’s up by nearly a quarter (23%) from 2.6 million at the end of April 2015. This rate will continue to accelerate as most new payment terminals deployed across Europe from January this year are contactless-enabled. This should help merchants achieve the target of all terminals in Europe accepting contactless payments by 2020. Visa Europe also said it is working with banks and other partners to give consumers access to at least one contactless payment device (including card, mobile, wearable, etc.) by 2020.
Who, what, where?
According to the data, the UK and Poland use contactless the most. British contactless adoption grew by 300% from 51 million transactions in April 2015 to 153 million in April 2016. A major driver of this incredible growth has been Transport for London. There have been more than 400 million contactless journeys since launch and Visa says 1 million contactless journeys are made every single day on the TfL network.
The launch and subsequent coverage of high-profile form factors such as Apple Pay also boosted the technology as has the fact that the largest supermarkets accept and encourage contactless payments.
‘Uncomplicated and proven route to market’
Ross Macmillan, head of Research and Insights at allpay Limited, points out that the average contactless transactions is now valued at around £8. “An amount that would have previously been paid in cash. In years to come, mobile payments could ultimately impact the growth of the cards market. But today, contactless cards provide issuers with an uncomplicated and proven route to market which customers are already enjoying and using.”
Visa Europe’s executive director of Product Management, Tristan Kirchner, said:
“The last 12 months has seen contactless payments continue its extraordinary growth as this quick and convenient form of payment reaches more consumers and merchants throughout Europe. This kind of success hasn’t happened overnight, and it’s down to the sterling efforts across many teams at Visa and the wider payment industry making today’s achievement possible while setting the stage for tomorrow’s technology, including new wearable devices and mobile payment services.”
Poor old MasterCard? Well not really, despite clearly trailing Visa, MasterCard hit a milestone of its own in 2015 as it recently announced it processed over one billion contactless transactions In Europe last year.
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